WPS seeks new rates for 2013

March 30, 2012

Wisconsin Public Service Friday filed a request with the Public Service Commission of Wisconsin to modify its retail electric and natural gas rates for 2013. The filing, based on economic forecasts from late 2011, calls for overall increases of 9.2 percent for electricity and 3.7 percent for natural gas. However, recent trends are suggesting a more optimistic economic picture. If those trends continue, they could allow WPS to reduce its electric rate increase request.

“The rate case development process is really a year-round effort,” said David Kyto, WPS Director – Rate Case Process. “The forecasts used in this case do not reflect the most recent trends in the economy. We will work with the Commission staff and interveners to update these forecasts, as appropriate, during the rate case.”

Kyto noted that WPS’s retail electric rates have risen by less than 0.4 percent per year over the last four years, and that its retail gas rates have actually decreased.

If approved at the requested level, the new rates will result in a monthly increase of about $7 for typical residential electric customers using 600 kilowatt-hours of electricity. If the requested natural gas request is approved, it will result in a monthly increase of about $2.50 for typical residential customers consuming 740 therms annually.

“We know that raising rates when the economy is still recovering is very unpopular with our customers,” said Kyto. “We’ve found areas to cut costs, like employee benefits and the 2010 workforce reduction. Utilities have an obligation to serve, which we take very seriously. That obligation comes with commitments to deliver safe and reliable energy.”

Kyto explained while other industries may choose to reduce the number of shifts or even close entire plants, WPS has levels of fixed costs that are much higher than most other businesses. Those costs include maintaining and repairing the company’s generation plants, 22,000 miles of electric lines, 8,000 miles of natural gas pipes and other energy delivery facilities (electric substations and natural gas gate stations, for example) to ensure the safe and reliable energy that customers absolutely count on. WPS incurs these costs regardless of the economy or other factors that affect energy usage.

“We simply can’t cut back on the activities that ensure that the lights come on when the switch is flipped and the furnace operates when the thermostat calls for heat,” Kyto said.